Research On The Influence Of Capital Structure On Business Performance Of Chinese Life Insurance Companies

Nowadays,with the economic development,people’s demand for risk protection has continuously increased,and the insurance market has shown a constant growth trend.As the capital market gradually matures and the competition in the insurance market intensifies,how insurance companies optimize their capital structure,improve operational performance,and enhance market competitiveness has become an important issue.This article first reviews the literature on capital structure and operational performance of the insurance industry,summarizes the research methods and results,and expounds the theoretical basis,influencing factors,measurement and evaluation methods,and impact mechanisms related to capital structure and operational performance,providing a basis for the research below.Then,analyze the situation of the capital structure of China’s life insurance companies,select 22 sample life insurance companies’ operating data from 2015 to 2021,and conduct a comprehensive quantitative analysis of the performance of the sample life insurance companies using the DEA-Malmquist model.Using the TDR and long-term capital liability ratio as independent variables,the comprehensive technical efficiency calculated by the DEA model,and use the Tobit model to conduct analysis.At the same time,financial indicators are introduced to verify,and a linear regression analysis is conducted using the return on net assets and return on investment as the explanatory variables to explore the relationship between them and conclusions are drawn.The research results show that the capital structure does have a significant influence on business performance.Specifically,TDR,long-term capital liability ratio,market share,comprehensive solvency adequacy ratio,proportion of health and accident insurance premiums,and length of life insurance company establishment have a significant impact on business performance.TDR and market share have a positive impact on business performance,while long-term TDR,the proportion of health and accident insurance premiums,and the length of life insurance company establishment have a negative impact on business performance.This indicates that in order to expand operations scale and improve profitability,life insurance companies need to conduct more investment and borrowing activities,increase the scale of assets and liabilities,but also need to control the rationality of the debt structure,to avoid excessive reliance on long-term borrowing,leading to a decline in solvency.Therefore,an increase in the TDR within a certain range can improve the operational efficiency of life insurance companies,but if it is too high,it may have a negative effect.High long-term debt to capital ratios may increase debt repayment pressure,leading to a decline in operational efficiency.In addition,solvency ratios,expenses,equity funds,and net premium income all have a significant influence on the performance of life insurance companies.Finally,based on the regression results,this article provides countermeasures and advice on optimizing the capital structure,increasing the return on investment,strengthening risk management and internal system construction,promoting digital transformation,and improving product innovation capabilities.